Is This a Sign the Pot Industry Could be Bigger Than Alcohol?

If this group’s preferences continue to follow the same trend, the future could be in cannabis.

In the U.S., 9 states and the district of Washington, D.C. legalized recreational marijuana. Moreover, many more states are legalizing CBD, the element of cannabis that relaxes makes users but not high. Although not legal in all states, weed is more accepted nationwide since decriminalization in those 10 jurisdictions.

A 2017 Yahoo News poll found that most of the 55 million recreational pot users in the U.S. are millennials born between 1981 and 2000. Most reported using cannabis in a similar way to alcohol – socially, consequently, only 25% smoke without friends.

Meanwhile, drinking alcohol may be on the decline among millennials. The number of university students drinking alcohol daily fell from 6.5% in 1980 to 4.3% in 2016 to 2.2% in 2017, according to America from the Monitoring the Future Study.

A new future in consumption

Recreational cannabis is a $10 billion industry, whereas alcohol is currently a $58 billion a year industry. But millennials’ attitudes are starting to change around drinking, and their dollars will follow. Many complain of alcohol hangovers and expenses, contrary to pot’s fewer side effects and lower cost.

Millennials are consuming cannabis, and investing in it

Millennials may also be more willing to invest in the sector than older investors. As the young are often more liberal and open to change, they may also be putting their investing dollars where their mouths are. They were in part the investor base that sent Canadian cannabis company Tilray Inc. flying up 179% in September.

Millennials want individual, authentic products

Millennials are choosing more individualized alcohol brands, and that has helped the weed industry too. As millennials become pickier in their tastes, they tend to decrease the volume consumed and increase the perceived quality. They’re drinking wines, craft beers and cocktails, and not liters of mixed alcohol just to get drunk.

Marijuana producers individualize their product, and it could easily replace alcohol as a relaxant. Data shows that when that happens, alcohol sales decrease, as found by researchers at Georgia State. conducted in 2017.

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Mr Bagg has over 20 years experience in financial services ranging from Capital Markets to Private Equity. Mr Bagg has helped clients build wealth, reduce taxes and plan for retirement. Drawing on his experience, Mr Bagg has spoken on different panels regarding investing and has written numerous due diligence reports and white papers in this area.

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